Best Practices Q & A - Part 8

Question: “I used the check list in your last news letter on Best Practices cultures and realized that our company came up quite short in a number of areas. Where should we begin to make improvements?”

Answer: “While to a degree it may depends on what, specifically is missing, we have found that the best way to start is by simply speaking and discussing openly the truth about the situation. However, it should be emphasized that it is very, very easy to fall into simply complaining, which does not work. Always, always place the discussion in a context of a clear intention, a clear vision of having the company perform better. This vision and intention has the effect of allowing others to skip the complaining and whining (if you prefer), and get on with the action steps that are needed.”
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Best Practice Cultures

This article continues the discussion of how to create high sustained levels of engagement by those that comprise an organization. Here we detail the concept of Best Practice Cultures, one of the 4 Essential Factors on the Path to Best Practices. Included are characteristics of the way people that comprise an organization are led, the way they interact with each other, and the inner, human, ‘from-the-heart’ motivations and inspirations that cause them to devote significant portions of their lives and energy to the organization for which they work.

• Essentiality of Leadership – Recap
• What a Best Practice Culture is.
• Where to start; moving forward now.

In previous PROACTION Best Practice Newsletters, we previously discussed three of the 4 Essential Factors, including:

• Effective systems and processes
• Effective continuous improvement programs
• Education and training

The fourth Essential Factor is Effective Leadership and Culture. In the previous Newsletter we focused on the Essentiality of Leadership, along with empirical research validating the idea that investing time and money in this “soft” area pays substantial returns in measurable performance – higher sales volume, better profitability, quality, customer satisfaction, lower turnover, and others.

Essentiality of Leadership – Recap

From this starting point, we will next explore what other characteristics must be present in an organization’s culture for a sustained, Best Practice Culture to emerge and endure over long periods of time. To recap, the key elements of leadership in this context are:

• Driven by leaders – effective leaders set difficult, almost “unreasonable” goals that require real striving by everyone.

• Vision driven – consistently articulate a compelling vision of the future.

• High performance-driven environment – highly focused, high-energy work environments – striving toward clear objectives.

• Simple structures and processes – effective leaders avoid complex organization setups; clear, simple accountability lines enable everyone to function well, knowing exactly what their role is.

• World-class skills – also called “operational excellence” – this is a striving for high performance in every area of the organization.

• Strong people systems – clear, strong focus on performance and motivation of and assigning the best people to critical jobs.

What a Best Practice Culture Is

With effective leadership driving and role-modeling these characteristics to others in the organization, the next question is to identify what the other, somewhat more detailed aspects of a Best Practice should one either look for, or strive to create in one’s current organization. As this is a potentially “large” topic, for brevity we will present this as a checklist, aspects or characteristics to look for, together with a very brief explanation that will help understand each.

These are:

• Employee commitment – related to high levels of engagement, for everyone, not just managers and supervisors. Individual, “front-line” employees are motivated, even inspired, to work for the company and its goals.

• Fully empowered employees – Authority for action has been sufficiently delegated so individual employees have enough authority to act on their own, without having to seek “supervisor approval” for a long list of activities that are an integral part of their normal work flow or job responsibilities. Another word for this is “autonomy” – independently responsible.

• High integrity workplace – The actions of leaders and people at all levels is such that everyone’s “word is their bond.” It is expected that promises made, will be kept. This enables all participants to avoid time-wasting, discouraging “CYA” actions, reports, memos, and approvals. If a leader, especially, has to “go back on his word” he/she understands that this will be regarded as a serious breach of trust by others, and so will go to great lengths to “make it right” with everyone.

• Strong trust relationships – Closely related to high integrity is strong trust relationships, up/down the structure of the organization and laterally. People at the same level in this context, view their co-workers as team-mates, whom they can count on to do their part, be straight shooters, honest, and to not leave their co-workers “hanging out to dry.”

• Highly effective leadership – Key part of the overall culture; repeated here to emphasize that this means leadership at all levels not just the C-level managers, but first line supervisors, mid-level managers, lead people, people in a supportive role such as Quality Assurance people with a “dotted-line” reporting relationship to others.

• Effective systems and processes – any problems with basic daily work flows are worked out, resolved, so that everyone may focus on getting the work done without a myriad of error-producing exception conditions, inaccurate/untimely information, and other factors that clog the work flows. This means a certain, basic level of effectiveness has been established, and is re-established quickly after any reorganizations or realignment of responsibilities, such as might occur with implementing a new enterprise software system. It is distinct from the continuous improvement process in that it assumes at least a certain, minimum standard of effectiveness has been establish for all processes, including minor ones.

• Performance-based compensation and reward programs – bonuses, profit-sharing, stock options, and the like, all keyed to revenue and profitability and/or other goals are in place, so that everyone who helps accomplish these goals has the opportunity to benefit personally from their achievement. Ideally, the reward/compensation system is designed to be responsive to work groups or units that an individual person can relate to, not just the company as a whole. o

• Customer-focused – everyone understands, and “gets” that the company, its performance, products, services are entirely driven by customer needs, desires, and that the purpose is to create “delighted” customers, beyond just “satisfaction” in a minimal sense. This is a feeling, pervasive in the way people act, both internally, between each other, and externally, to customers and suppliers.

• Effective 360-degree communications – the review process includes one’s subordinates and peers, as well as just “keeping the boss happy.” In many job situations, it may be appropriate to seek in put from those outside the company, such as customers or key suppliers with whom the person regularly interfaces. The benefit of this is not only expanded understanding of how a person is functioning so managers can make better assessments, but for the person’s benefit as well, to support and drive personal and professional improvements as well.

• Commitment to learning and skill development – This characteristic is integral to one of the Four Essential Factors – an ongoing, effective education and training program for everyone. For a fully effective Best Practice culture, it is vital that those doing the jobs, and the improvement process, themselves continue to improve over time – to “improve the improvers,” so to speak.

• Emphasis on recruiting and retaining outstanding employees – realizing that highly effective people are critical, Best Practice cultures pay close attention to who is doing which jobs, so that each job can be performed as well as possible. The key to this is careful, effective recruiting, and then working hard to retain the best people possible. Significant turnover is a sure sign of culture difficulties.

• High degree of adaptability – Like the US Marine slogan, “improvise, adapt” – the effective Best Practice culture participants do not cling to established work structures, job assignments, etc., but embraces the truth that change is desirable and required for the kind of success everyone is seeking. So, it is expected that learning new skills, technologies, ways of interacting and working together are all part of this steady march forward to success in today’s arenas, and tomorrows which may not have even been innovated yet.

• High accountability standards – key to integrity and trust is the notion that people are responsible for delivering on what they commit to doing. The organization’s work flow, and social process depends upon this high standard of personal, work team, organization, and business unit accountability. If extraordinary efforts are required, it is assumed that these will be taken if necessary. It is a ‘no-excuses” environment.

• Demonstrated support for innovation – An essential aspect of a Best Practice culture is a pervasive thought-process of always developing, trying out, experimenting with new, potentially better ways of doing things, for both products and services, as well as “purely internal” functions as well. So, in addition to obvious things such as new, exciting products, a Best Practice culture will experiment with internal functions such as self-service employee benefits intranet web sites.

Where to Start – Moving Forward Now

In order to make an “get started” action list, we suggest that you take this list in hand, or at least in mind, and compare it with the working environments, the cultures, of companies and organizations you have work with, worked for, or served in a leadership role.

Think about each one, comparing it to what you perceive, and the result will be a “gap” list – a list of where to start. Bear in mind that very few organizations exhibit all of these characteristics at a high level.

The key insight is that the more of them, and the more completely they are evident, the stronger the culture will be, the more resilient, adaptable, and “count-on-able” it will be to produce high performance results, in quality, revenue/sales growth, and above industry-standard profitability.

Finally, remember that even small improvements will bear fruit, will show results you can measure.

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A Proaction Approach to Best Practices

Companies and organizations can be grouped into three basic categories:

· Innovators – those who are literally at the leading edge of process development; often have failures associated with risk taking, but the "wins" are big enough to offset these.

· Best Practice seekers – those who work to achieve high performance with minimum risk; by adopting practices and methods already demonstrated to work well, typically in another company and/or industry.

· Strivers – below average performing companies that are working to "keep up with the pack."

Where is your company? Unless you are an innovator, operating at the leading edge in a number of areas, your company is vulnerable to someone else who is or becomes one.

A given company may be to some degree, in all three categories. To create an example, a company could be highly innovative in its go-to-market strategy and execution. At the same time, in its R&D and product development area, it could be utilizing known, proven best practices. In its manufacturing area, for a variety of reasons, this area could be characterized as a "striver" with significant areas that are well below known best practices.

Competition is increasingly global as most company leaders are all to aware. Consequently, those with foresight seek to achieve quantum improvements in their company’s performance.

The most powerful way is to seek out Best Practices and adopt them as quickly as possible. Those who follow this path often have been able to achieve substantial performance improvements.

PROACTION provides comprehensive assistance to bring proven Best Practices into use in a wide variety of areas. The Path to Best Practices is part process, part content. Simply knowing what a best practice is for a given area is just a starting point, of course. It must be implemented correctly to gain the expected operational and financial results.

We urge you to bookmark the PROACTION web site and return regularly, or better still, subscribe to our RSS feed. Valuable information available either at no cost in the Free White Paper section or our web site, or at very moderate cost in the PROACTION Best Practices e-Store is continually being expanded and updated. The next update could contain an item that proved very valuable for you and your team. Quick links:

· Free White Papers
· PROACTION Best Practice e-Store
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Best Practices Q & A - Part 7

Question: “What do you think of the “kick a__, take names” approach? Doesn’t this serve as a strong reminder of who is in charge, that work is serious, not just a game?”

Answer: “These myths seem to persist for a variety of reasons. However, close examination of the cultures of the most consistently high performing organizations over time, will consistently reveal that these practices are a sign of immature managers. Even in the military this practice is not deemed acceptable any more, but is a sign of weak leadership.

The basic reasons are that it forces those being “managed” this way to pay more attention to “keeping their noses clean,” to covering their actions with memos, reports, and political alliances than to the actual value added by their work. All of the CYA activity is essentially organizational waste – it is not value adding work, but only serves to deflect criticism, potential punishment, or worse.
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The Essentiality of Leadership

This article continues the discussion of how to create high, sustained levels of engagement by those that comprise an organization. Here, we discuss what true leadership is, the behaviors that comprise it, and how effective leadership is an essential, must-have, management Best Practice for a sustained, high-performance organization. Topics include:

• Research validation of leadership
• The 6 leadership attributes of high performance companies.
• How a leader leads

Previous discussion of the essentiality of engagement for generating a Best Practice organization demonstrated its dependence on effective, true leadership. So how does leadership generate engagement? Are there specific aspects of varying leadership methods and styles that lead to high, sustained levels of engagement?

Research Validation of Leadership

The short answer is “yes.” Among the most unambiguous research on the relationship between leadership, engagement and sustained high performance is work done over many years by the leading consulting firm, McKinsey & Company. There are three critical management Best Practices validated by this research. Each of these practices, on its own, leads to a clear outcome or result to enhance the effectiveness of the organization.

However, put together, each interacts, reinforces and strengthens the others in a synergistic way to substantially increase the power of their effect. These three Best Practices are:

Clear roles – this means that everyone has a very clear understanding of what they are working toward, the vision that drives the whole organization, as well as its specific aspect in their work area. They know what is expected of them – when they are making good progress and when not – and on their own, not by “checking with the boss” every five minutes.

In this context, a person knows what skills can be enhanced to good work result effect, and which may be irrelevant. He/she can prioritize time allocations in a way that makes sense and supports high performance levels.

Inspiring vision – When conveyed by an effective leader, the organization’s vision brings alignment between the vision, its details, and what people are actually doing. A powerful vision moves people beyond “motivation” and “incentives” to inspiration – activity that gives meaning to their life. A compelling vision is a good answer to the question of “what are we giving our life for?”

Open, trusting culture – people cannot function effectively if they have to constantly second-guess what they say and do, fearful for reprisals, insults, reprimands, or punishment. If their co-workers are scheming for their jobs, or there is withholding of information to strengthen personal power positions, there will be severely blocked flows of information, communication and collaboration that are essential to high performance.

a Put another way – an open, trusting work environment eliminates all of the thought, time and energy that has to be devoted to simply protecting one’s self, to second-guessing, gossiping, the grapevine (always vigorous in dysfunctional cultures), and jockeying for power. This time and energy can then be devoted to the value-added tasks at hand, that advance the individual effort, work team, and organization towards its vision. Other efforts simply go in a circle, in effect, degrading forward progress.

The 6 Attributes of Leadership

There are many ways to look at, describe, and otherwise convey the idea of leadership. In the context of Best Practices, we can focus on those characteristics that have been found in research with hundreds of companies to be key factors in generating sustained, high levels of performance. Leadership in politics, sports, religion or other areas have other aspects and characteristics in those contexts. Here, we focus on behaviors by leaders at every level in these high-performance companies. This research has identified and validated these attributes:

1. Driven by Leaders – There is usually an “unreasonable” aspect to goals and targets that are set by these highly effective, visionary leaders. It is important to understand that these goals are not completely unreasonable. They do require, though, real focus, real effort, and for everyone to grow themselves and the organization in the process. The word “challenge” applies here.

If goals are perceived as unattainable, most of us give up before we even start. So there is a delicate balance between pushing too far out, and not far enough to stretch for.

2. Vision Driven – these leaders consistently, repeatedly articulate a compelling vision of the future – what “there” looks like – around which strategies, tactics, improved management processes, systems and actions can be focused.

3. Highly performance-driven environment – these leaders create a strong, intensely focused, energized work environment – focused on results. In this context, clear roles and high levels of accountability come into play. People throughout the company work hard, focused on goals they stretch for, feel accountable for, and that involve some risk taking. The result is growth – personal, work team/group, and for the company.

4. Simple structures and processes – if the path by which one’s efforts affect movement towards the vision is complex and convoluted, discernment of what and how to do things is harder. Effective leaders simplify organization structures for clear communication and accountability. Management processes must be understandable, workable, efficient and reliable to be effective. Continuous improvements in this area are part of this pattern of high performance as they simplify and standardize processes that provide communication and direction at every level.

5. World-class skills – Effective leaders at these high-performance companies encourage their organizations to not only do many things well, but to become absolutely the best – world-class competence – in at least one major functional area. There is a consistent focus over time on continuously improving, building skills and expertise at how the company is managed. These skills and competencies are seen as an essential part of the company’s competitive edge.

6. Strong people systems – There is a clear, consistent focus on performance and motivation, not just assigning people to jobs. It is understood that placing the best people in the most critical positions, then ensuring that they do well are essential to success. As a result, there is considerable thought and care put into knowing who the organization’s people are, their strengths, weaknesses, beyond just each manager’s direct reports, but several levels down. Everyone understands that building a “strong bench” is a top priority.

How a Leader Leads

Having established that having, and being an effective leader is essential for sustained high organization performance, and for engaging its people in the purposes and vision of the organization, the next question may well be “what does a leader do that makes him/her a leader?” When is a leader leading, and when is he just “managing?”

The behaviors and actions of an effective leader, in the Best Practice generating context fall into two rough categories – personal behavior and communication:

Personal Behavior - Key attributes of effective leadership behavior include:

• Self-knowledge – displays a consistent alignment between what is said, the values articulated and demonstrated in behavior and principles – “Walks the Talk.”

• Takes responsibility – strong leaders step up and take responsibility decisively, displaying courage when things don’t go well or fall short. Blaming others is a clear sign of weakness, and a lack of courage.

• Leads by example – understands that others “get” what is demonstrated, what is implicit in actual behavior and actions, not just words. This may involve making a difficult decision in a crisis, or by actions as simple as just being punctual, or always following up when something is promised. The leader is very aware that others are observing his/her actions and will pay more attention to the actions than words spoken.

• Integrity – effective leaders display and exemplify honesty and integrity, demand it of themselves and others, not only personally, but in official company actions.

• Creates more leaders – sets processes in motion to empower, strengthen and grow other leaders within the organization at every level. This is a key measure of leadership effectiveness as it is the only real way to leverage a vision, and insure a sustained level of high performance. Without it, a popular “leader” may be nothing more than charisma.

• Takes people risks – bets on growth, expansion in assigning people to key roles, and projects. When a person is assigned a role that involves more than they have previously done, there is an implicit statement of confidence that helps people grow and strengthen in their abilities.

Leadership Communication - The communications, the messages generated by a good, effective leader include these characteristics:

1. Tells it like it is – realistic, factual, no “mushrooming” - important facts, including bad news, is not sugar-coated or withheld. This produces a feeling that “we’re all in this boat together.”

2. Makes change exciting – reinforces each win to create more wins. As this strength grows, setbacks and failures are easier to take, accept and move through. A “spirit of adventure” energizes the whole process, making it more exciting. Key – all improvements are change. There is no way to improve performance without becoming OK with regular change.

Honda has a famous annual celebration of the largest failure during the previous year. This is obviously occurring in a spirit of fun – generated by the company’s many wins. Which makes more changes easier, which in turn allows more risk, which in turn – you get the idea.

3. Compelling vision communication – this involves:

• Paints a picture - speaks in images, something people can visualize.

• Simple – no jargon. Clear, unambiguous language is key.

• Repeat, repeat, repeat – the leader must consistently restate the vision message. It is a thread that runs through every key communication.

• Deal with uncertainty and risk head-on – when risk and uncertainty are articulated up front, this activates the inspirational aspect of challenge in people.

• Uses all mediums of communication – meetings, emails, memos, personal interactions. The same vision, consistently articulated and conveyed in personal statements in all contexts and situations spreads it throughout the organization.

Leadership then, is clearly distinguished from management, with its emphasis on detailed direction, controls, punishments and reward systems. The drive to achieve is something that comes from within each of us, and cannot be coerced very effectively, but is called forth by inspiration.

Finally, while many of us have intuitively believed these ideas for a long time, we now have hard-nosed, empirical research which clearly and emphatically validates that effective leadership is a requirement for sustained high levels of engagement, and that high levels of engagement are a requirement for true, world-class, Best Practices high performance levels.

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Best Practices Q & A - Part 6

Question: “Last week you wrote about the Gallup study which showed that 75% of the 8,000 managers at the 400 companies studies were not actively engaged in their company’s purposes. This seems impossible, given that all of the companies are going concerns, even dominant in their fields. How is this even possible? It seems completely counter-intuitive.

Answer: “What this research shows, essentially, is the amount of potential improvement available to an organization, should it decide to improve in this area. All improvements are like this – they are something that is currently not being done, and if it were, would have a better result. Companies survive and thrive for many reasons, but the most important is to just be better than their competitors. It is the size of this latent, untapped potential that provides the endless opportunities for improvements, new Best Practices – whether done internally, or by a competitor.

Truly mediocre companies often survive for years, simply because no one else has entered the field. But when a better one does, the mediocre operations are doomed unless they change – fast. The corporate landscape is littered with the carcasses of once-dominant companies that are no longer with us. We’re sure you can think of many yourself. Just make sure your company is not among them by working relentlessly to generate improved practices, processes, and methods – true Best Practices for your company and industry.”
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